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Entries in Affordable Care Act
(8)

Since its passing in 2010 the clarion call of Obamacare opponents was that the employer mandate would incentivize employers to cut hours so as to reduce the number of “full time” employees for whom they would be required to provide health insurance. In 2015 (the first year of the employer mandate), one employer was accused of doing that, in a very public and vocal way. In a complaint filed in the Southern District of New York, Maria De Lourdes Parra Marin sued her employer, Dave & Buster’s, Inc. when it cut 10-25 of her hours per week. According to the Complaint, Marin’s employer proclaimed that compliance with the ACA would require it to cut hours to reduce the number of full time employees from 100 to 40 for the purpose of avoiding two million dollars in additional health insurance costs. Sure enough, Plaintiff alleges, after the employer mandate took effect, her hours were cut, she lost full time status, and her insurance was cancelled.

Last week a class action was filed against restaurant chain Dave & Buster’s Inc. accusing the restaurant of decreasing employee hours to avoid providing health insurance under the Affordable Care Act. The action has been filed in the U.S. District Court for the Southern District of New York under Section 510 of the Employee Retirement Income Security Act. While academically discussed by many after the passage of the Affordable Care Act as a potential claim against employers who were decreasing hours to avoid the mandate, the lawsuit is the first to test the theory.

Section 510 provides, “[i]t shall be unlawful for any person to . . . discriminate against a participant or beneficiary . . . for the purpose of interfering with the attainment of any right to which such participant may become entitled under the provisions of an employee benefit plan.” The lawsuit includes a proposed class of approximately 10,000 employees who were moved to part-time status in 2013, decreasing hours from 30 per week to approximately 17—thus eliminating their health insurance coverage and avoiding the ACA’s employer mandate. We will keep readers abreast as this case develops.

The following was originally posted on Verrill Dana's Employee Benefits & Executive Compensation blog, Benefits Law Update.

The 2014 end-of-year rush seems somewhat less frantic than in years past. Nevertheless, with a month left in the year many employers may find themselves scrambling to meet plan amendment and notice deadlines, and planning for 2015 may still be in process for some. This summary discusses a few key developments regarding employee benefit plans – especially group health plans – for employers to consider as they finish 2014 and move into 2015, including developments in:

Remember at the beginning of the year when we harped about the importance of reviewing your policies as they relate to the use of independent contractors? Remember the seminars, the blog posts, the not-so-subtle alert? No? Well you can refresh yourself here. But all joking aside, the issue is not going away, and in part, the Affordable Care Act (ACA) is making the issue even more prevalent.

On Monday we posted When the Company Gets Religion: Contraceptive Mandate Blocked by the Seventh Circuit and provided friends and clients with a discussion on the Seventh Circuit’s recent decision in Korte v. Sebelius. In that post we discussed the circuit split that has been created over this issue and the determination as to whether the contraceptive mandate of the Affordable Care Act (“ACA”) can properly be instituted against companies that object to the mandate for religious reasons. Yesterday, the United States Supreme Court granted certiorari in two cases to resolve the issue.

The Seventh Circuit Court of Appeals ruled 2-1 on November 8, 2013, on behalf of two closely held companies and their Catholic owners, that the “contraceptive” mandate of the Affordable Care Act (ACA) violated their rights under the Religious Freedom Restoration Act. Korte v. Sebelius, No. 12-3841 (7th Cir. Nov. 8, 2013). The so-called “contraceptive mandate” requires companies to provide contraceptive coverage in group health care plans for employees. In finding that the companies, as well as their Catholic owners, could challenge the mandate, the majority of the appeals panel determined that forcing these companies to provide contraception and sterilization coverage in their employee health care plans, “substantially burdens their religious exercise rights.” The Seventh Circuit became the first to issue a preliminary injunction barring enforcement of the measure.